HCL fights for stake in Cambridge

Bangalore/ New Delhi: Triggering possibly the biggest M&A in the Indian IT space, the $1.1 billion HCL Technologies is likely to make a bid to acquire Cambridge Solutions, one among the top BPO outfits, valued at $350 million.

According to sources, HCL had signalled interest to acquire 42 percent promotors? holding. The deal could be worth $150 million keeping the enterprise value in mind. The promoters of Cambridge, which is listed, have mandated Lehman Brothers to scout for potential suitors.

According to a national daily, there were possibilities of EDS and global buyout funds like Apollo being interested in the deal. When contacted, a HCL spokesperson said, "We do not comment on speculations.? A top Cambridge official also refused to comment.

At the given enterprise value, the deal for Cambridge Solutions could be in the region of 145 per share. Cambridge Solutions? scrip closed the day at 123 at BSE. A successful bid for Cambridge would significantly bolster HCL?s BPO play. Almost two-third of Cambridge?s revenues come from high-end BPO operations spread across US, India and Europe. It has a strong presence in the lucrative insurance processing domain with around 2,000 of its total 4,500 employees located in the US.

HCL?s BPO operations located at 9 centres in India, two in the UK and one in Malaysia, provide both voice and non-voice services. For HCL, their BPO operation constitutes around 17 per cent of its revenues and has around 10,000 people.